DOWNRIVER UTILITY WASTEWATER AUTHORITY
December 14, 2023 MEETING MINUTES
CITY OF TAYLOR COUNCIL CHAMBERS

 

1. ROLL CALL AND INTRODUCTIONS
DUWA Chair Gail McLeod (Allen Park) called the meeting to order at 9:01 AM and asked for roll call to be taken. At the time of roll call, voting representatives were in attendance from 10 communities: Allen Park, Belleville, Dearborn Heights, Lincoln Park, Riverview, River Rouge, Romulus, Southgate, Taylor, and Wyandotte. A quorum (at least 7 members) was present.

 

2. APPROVAL OF AGENDA
Copies of the Agenda were made available prior to the meeting (Attachment 1). Motion by Mayor Bill Bazzi (Dearborn Heights) and supported by Rick Rutherford (Belleville) to approve the Agenda. The motion passed unanimously by all attending members.

 

3. APPROVAL OF MINUTES FROM NOVEMBER 9, 2023 BOARD MEETING
Copies of the meeting minutes from the November 9, 2023 Board meeting were included in the pre-meeting Board packet (Attachment 2). Motion by Mayor Joseph Kuspa (Southgate) and supported by James Krizan (Lincoln Park) to approve the minutes. The motion passed unanimously by all attending members.

 

4. LEGAL UPDATE
Attorney Brandon Grysko, of Fausone & Grysko, provided the Legal Update.

a. General Counsel Monthly Report
Attorney Grysko stated that a written summary of the monthly legal update was provided in the pre-meeting Board packet (Attachment 3). Attorney Grysko stated that it was a typical month of activities as Fausone & Grysko assisted the System Manager with various matters particularly related to the Biosolids Dryer Facility project.

b. Annual System Manager Evaluation Results
Attorney Grysko reminded the Board Commissioners that the System Manager’s work performance is evaluated by the Board on an annual basis per the System Manager contract. The performance evaluation survey questions were administered via an online survey platform following last month’s Board meeting. The survey closed after Thanksgiving and 13 responses were received. The System Manager received an average score of four out of five possible points. The detailed survey results were shared with the System Manager and Board Officers.

c. Request for Approval of Final, Reconciling Change Order & Release of Retainage to Walsh
In early 2023, Walsh, the progressive design-build entity for the Biosolids Dryer project, submitted a Request for Equitable Adjustment (REA) to DUWA for reimbursement of additional costs and out of scope work items related to project delays. The Dispute Resolution process required that both parties informally negotiate a resolution. A Small Group comprised of Chairperson McLeod (Allen Park), Roberto Scappaticci (Romulus), Jim Taylor (Van Buren Township), Veolia CPM, and the System Manager was created to assist with the Walsh Dispute Resolution process. Fausone & Grysko also supported these efforts. As a result of the Dispute Resolution process, a final, reconciling change order in the amount of $574,731.92 was developed and agreed upon by Walsh (Attachment 4). The final change order amount includes reimbursement of Walsh’s out of pocket expenses, hard costs to sub-contractors, and insurance renewals ($303,451.72) as well as release of remaining retainage ($271,280.20). Walsh’s initial REA requested reimbursement of around $1.5M, which was about 10% of the total contract amount, but the final change order amount is only about 4% of the total contract amount.

An attorney-client privileged memo was circulated to the Board Commissioners earlier this week that further explains the background and history that led to development of this final, reconciling change order. Attorney Grysko requested that any questions related to this memo be directed to him privately.

With approval of the final, reconciling change order, product warranties will remain in effect and the Builder’s Risk insurance will remain in effect through July 2024. Walsh will also provide a Letter of Credit to DUWA that will secure Walsh’s performance during the warranty period, during completion of outstanding scope items, and during testing of the system downstream of the Walsh-scope equipment.

Attorney Kerry Morgan (Riverview’s attorney) asked if liquidated damages are being assessed with this final change order. Attorney Grysko responded that through the negotiations, it was agreed upon that DUWA would waive liquidated damages in exchange for not paying the additional amounts that were requested in Walsh’s REA (totaling $1.5M). However, if litigation commences, Walsh can sue DUWA for damages and DUWA can sue Walsh for non-liquidated damage claims. Attorney Kerry Morgan (Riverview’s attorney) asked what DUWA is buying as part of this final change order. Attorney Grysko responded that DUWA is buying deference. Attorney Grysko also noted that the Biosolids Dryer project is also supported by other contractors besides Walsh, and DUWA will still retain rights against Walsh if there was a litigation suit with another contractor as Walsh could be included in potential litigation suits with other project contractors.

Chairperson McLeod (Allen Park) asked whether Walsh installed the dryer system equipment. Attorney Grysko responded that Kruger supplied the equipment and Walsh installed the equipment. Wade Trim was the design engineer. He added that the dryer equipment was installed based on Kruger’s specifications, and the upstream and downstream components were designed by Walsh.

Motion by Mayor Bill Bazzi (Dearborn Heights) and supported by Greg Mayhew (Wyandotte) to approve the final, reconciling change order to Walsh for a fee of $574,731.92. The motion passed unanimously by all attending members.

Following the Legal Update, Kevin Lawrence (Van Buren Township) arrived at the Board meeting.

 

5. SYSTEM MANAGER UPDATE
System Manager Lambrina Tercala, of OHM Advisors, provided a verbal summary of activities since the last meeting. A written summary was provided in the pre-meeting Board packet for the System Manager Report (Attachment 5).

a. System Manager Monthly Report
System Manager Tercala noted the following highlights from the System Manager Report

• • • EGLE provided a draft version of DUWA’s NPDES permit renewal on October 24, 2023. The NPDES permit allows DUWA to discharge treated wastewater into the Detroit River in accordance with the permit requirements. The draft permit has been reviewed by OHM and Veolia, and is now with the Legal Committee for review. The draft permit was also provided to the Board Commissioners and Technical Committee for feedback. EGLE initially requested that comments be received by November 10, 2023, but DUWA requested an extension to January 26, 2024 and the extension was approved by EGLE. Comments from the Committee members and Board will be compiled in a response letter to EGLE.

    • EGLE will be conducting a routine reconnaissance inspection of the DWTF following the Board meeting.

    • DUWA is in receipt of a Class A permit application from a proposed Taco Bell development in Taylor. The Class A permit allows for direct connections from the local sanitary sewer into DUWA’s interceptors provided that the permit requirements are met. Design drawings have been reviewed by Wade Trim, who was authorized by the System Manager to perform the engineering review, and comments have been provided to the developer. The developer is to demonstrate how the flow will be discharged into the manhole. Taco Bell will own and operate the assets including the connection into the manhole. Fausone & Grysko is also working on finalizing the utility maintenance agreement.

    • Michigan State Representative Jaime Churches visited the DWTF yesterday after hearing of the numerous odor complaints received from Wyandotte residents. She also lives in Wyandotte and was very appreciative of the work DUWA is doing to address the odor issues. She appreciated the site tour and the opportunity to learn more about the DWTF, and indicated that she now has a better understanding of the DWTF and how to respond to residents who raise complaints in the future. Cal Kirchen from U.S. Representative Debbie Dingell’s office also attended the DWTF tour.

    • Representatives from Aon, DUWA’s insurance provider, are in attendance today to present DUWA’s insurance renewals for 2024.

    • Fitch reviews DUWA’s credit rating on an annual basis, and reaffirmed DUWA’s rating of ‘A’ with a stable outlook.

b. UV Disinfection Replacement Project Update
System Manager Lambrina Tercala, of OHM Advisors, provided an update on the UV Disinfection Replacement Project to the Board (Attachment 6). Black & Veatch has provided the 50% design deliverables which include the Basis of Design, drawings, specifications, and updated cost estimate. There was some delay in receiving the Basis of Design and cost estimate as these were received earlier this week. OHM and Veolia met with Black & Veatch to review the 50% design deliverables, and Black & Veatch will also be hosting a meeting with the Technical Committee tomorrow to review the 50% design deliverables. OHM and Veolia have provided their comments to Black & Veatch. One primary comment is that the new power panels required as part of the new UV system will produce more heat than the existing power panels, and the existing HVAC system will not be able to provide sufficient cooling. Black & Veatch felt that design of an upgraded HVAC system to accommodate the additional heat was outside of their scope. DUWA expects Black & Veatch to design a complete and functional system per the Request for Proposals (RFP), and as such, it is expected that design of a necessary upgraded HVAC system is part of their scope. A response from Black & Veatch is pending.

DUWA has received a $10M earmark from the State of Michigan for the UV project. Senator Geiss’ office has provided paperwork that needs to be completed in order to execute the Grant Agreement. Funds will be administered on a reimbursement basis, however it is understood that some communities could receive 50% of the grant funds up front. These funds would then need to be spent before additional funds would be disbursed. OHM will work with EGLE to understand whether DUWA might be eligible to receive 50% of the funds up front. DUWA is also in the process of securing a municipal bond to fund the remaining portion of the UV project. PFM released an RFP for bond underwriting services. Proposals have been received and are currently under review by PFM.

Mayor Tim Woolley (Taylor) asked if design of an upgraded HVAC system will be an additional cost. System Manager Tercala said that design of an upgraded HVAC system will not necessarily be an additional cost, but a response is pending from Black & Veatch. Mayor Tim Woolley (Taylor) asked if Black & Veatch can retract their bid. Attorney Grysko responded that Black & Veatch cannot retract their bid as that would violate the contract.

Roberto Scappaticci (Romulus) asked how the updated cost estimate compared to the project’s budgeted amount. System Manager Tercala responded that the updated cost estimate is still within the initial range of $13.5M to $16.5M that was provided at the beginning of the project noting that the updated cost estimate still carries significant contingencies at this time. DUWA’s budget accommodates the estimated project costs. System Manager Tercala also noted that the equipment price provided by Trojan, the selected Named Manufacturer, is locked in so contingency should not be added to this cost as it is currently. Black & Veatch will review and revise the cost estimate accordingly.

Mayor Joseph Kuspa (Southgate) commented that it is important to ensure that DUWA’s UV system is not unique considering that Black & Veatch worked with Trojan to select an alternate UV bank configuration to fit within the existing channels. System Manager Tercala responded that there are currently five existing channels, but only four channels contain UV equipment, and each of the four channels has two UV banks. For the new UV system, Black & Veatch originally proposed three UV banks per channel, but this configuration would make it difficult to remove the banks from the channels for cleaning and maintenance and would also require significant channel structure modifications. Black & Veatch then reviewed the hydraulics and redundancy needs of the system and determined that only two UV banks per channel are needed. The proposed hydraulics and redundancy needs were also reviewed by and agreeable to EGLE. The size and configuration of the UV banks as well as certain other UV system components are unique to DUWA.

Mayor Joseph Kuspa (Southgate) asked if use of the fifth UV channel will provide extra flow capacity. Jason Tapp responded that the new UV system and use of the fifth channel will not provide additional capacity as the current flow capacity through the UV system will remain the same. Jason Tapp added that the fifth channel will be used to help with redundancy. He also added that the UV bulbs will be more energy efficient in that only 600 bulbs will be used in the new UV system compared to the 720 bulbs that are used in the current system. The new UV banks will sit in the channels such that there will be more reactive space for disinfection, and energy consumption is expected to be reduced. The channels are unique to DUWA because the original contact chambers were not designed for a UV system, so the channels were retrofitted to accommodate a UV system back in the late 1990s when the UV system was installed.

c. Biosolids Dryer Facility Project
Prior to the dryer system update, System Manager Tercala and Jim Taylor (Van Buren Township) provided a review of the history of the biosolids dryer project. A packet containing figures and diagrams of the DWTF and the dryer system were provided to the Board for reference. The Biosolids Dryer Project pro forma was last updated in August 2023 based on actual dryer run times. A cost savings is still expected even with the limited dryer run times. No change to the pro forma is expected at this time. An updated pro forma will be developed as the dryers are operated for longer on a more consistent basis, which will provide for a better expectation of costs.

One of the project’s success factors included the production of Class A biosolids that could be used for beneficial reuse as opposed to being sent to landfills for disposal. At the time of system transfer, DUWA had several landfills available and willing to receive dewatered solids, but landfills are now indicating that they no longer want to receive dewatered solids so DUWA is at jeopardy of not having a landfill disposal outlet for its dewatered solids. Another project success factor included the reduction of O&M costs. The production of Class A biosolids reduces trucking costs as the weight of the dried solids (90% dry) is much lighter than the weight of the dewatered solids (30% dry). Disposal costs are also eliminated as landfill disposal is not necessary with Class A biosolids. The installation of the dryer system required the removal of the existing belt filter presses which also eliminated a significant amount of O&M effort.

Veolia’s subject matter expert researched two different solutions to produce Class A biosolids. One solution was a medium-term solution which involved the installation of a Dryer System. The other solution was a long-term solution which involved the installation of an anaerobic digester, which would require a larger footprint that the DWTF may not be able to accommodate. Given the volatility with the landfill availability, the medium-term solution was selected and was determined to be a viable option. Veolia then engaged Veolia CPM to manage the project and the equipment procurement.

A progressive Design-Build (pDB) delivery method was selected as it would provide an accelerated schedule as it was desired to get the system online as soon as possible due to the landfill limitations and expected cost savings. With a pDB delivery method, the selected contractor and engineer would develop the design through 60% completion and generate a Guaranteed Maximum Price (GMP) for completion of the design and construction. Upon completion of the 60% design and GMP, the owner can then proceed with construction or stop the project. DUWA decided to proceed with the project.

A draft RFP was provided to interested bidders on the project to obtain their feedback. Walsh indicated that they were interested in bidding, but requested that the contract be split between an equipment RFP and a design-build RFP. DUWA split the contract as requested. However, looking back, DUWA would not have split the contract given the current contract challenges with this project. Proposals were received and a selection committee reviewed the proposals, interviewed bidders, and provided a recommendation. Four proposals were received in response to the equipment RFP. Kruger provided the lowest cost and had the fastest fabrication period. They proposed a two-dryer system for redundancy, and their equipment could also be installed within the confines of the existing building. Kruger also proposed to install a crusher at the end of the dryer system to crush the biosolids in order to maximize the amount of dried solids that could be hauled in each truck to reduce hauling costs.

With the ongoing dryer system issues and contract closeout challenges, a small group was brought together to assist with contract closeout negotiation efforts with Walsh. This effort involved identifying the issues that were attributable to Walsh versus the issues that were attributable to Kruger. As a result, a final, reconciling change order was agreed upon by Walsh and the small group to closeout Walsh’s contract. However, dryer system commissioning issues still remain. A third-party consultant was engaged to act as a task leader and assist with technical issues. The consultant documents the discussions on the daily morning meetings and helps identify solutions. The information discussed during the daily morning meetings is also discussed in detail with the small group.

Mayor Joseph Kuspa (Southgate) asked about the next steps for reaching a conclusion on this project. System Manager Tercala responded that on the technical side, the goal is to figure out how to get the most value out of the dryer system. Kruger is to provide a dryer system testing plan that will need to be agreed upon by DUWA. Originally, agreement of the testing plan was scheduled to occur in late January, but this date may be pushed back. Mayor Joseph Kuspa (Southgate) requested that the biosolids monthly reports include a projection on when the dryers will achieve and maintain consistent operation at full capacity. Chairperson McLeod (Allen Park) added that DUWA is keeping extensive documentation and is also reviewing the impact of the unanticipated additional O&M labor that is needed to maintain the system. Jim Taylor (Van Buren Township) added that he still wants to see this project achieve success given the time and investment made.

Mayor Tim Woolley (Taylor) asked if the UV Disinfection Replacement project would still be necessary with or without the dryer system. System Manager Tercala responded that the UV project is independent of the dryer system and would still be necessary. Jeff Dobek (Riverview) asked if the biosolids dryer project is still advantageous to DUWA if it can only be operated at 50% of its design capacity. Chairperson McLeod (Allen Park) responded that the project would still be advantageous as it would still reduce the amount of solids going to the landfill as landfills may soon no longer accept dewatered solids. Jason Tapp added that the dryers run better at 50-60% of their design capacity, but as the dryers reach 75-80% of their design capacity, more issues arise. However, every truckload of dried product is three times cheaper than a truckload of dewatered solids, so DUWA is still realizing some cost savings even with the dryers operating at 50% capacity. Mayor Joseph Kuspa (Southgate) asked what cost savings DUWA can expect if the dryers only operate at 50% design capacity. System Manager Tercala responded that the most recent pro forma provides the cost savings based on current operations, which include one dryer online at 50% capacity through the end of 2023 as well as the various pump and equipment repairs that have been needed at higher frequencies. She added that the current pro forma accounts for replacements under warranty as well as future replacements that will not be under warranty.

Attorney Kerry Morgan (Riverview’s attorney) asked at what point do the project efforts stop if full dryer capacity cannot be achieved. Jim Taylor (Van Buren Township) responded that DUWA’s legal team is addressing this and these conversations with the technical team are in progress. Attorney Kerry Morgan (Riverview’s attorney) also asked if the pDB delivery method would be proposed for future projects. System Manager Tercala responded that OHM would not advise on a split contract for future projects; however, design-build and pDB delivery methods have the benefit of locking in project costs. OHM would be sensitive to advising on a pDB delivery method in the future.

Chairperson McLeod (Allen Park) asked if the current pro forma is based on the current level of operation. Jason Nash responded that the most recent August 2023 pro forma is based on the current level of operation. The 2024 values assumed that both dryers would be in operation at 85-90% of their capacity, and values after 2024 include escalation. Pump replacements not covered under warranty are included in the pro forma. Jason Tapp asked if the timing of pump replacements in the pro forma are based on industry standards or on the actual pump replacement needs of the system currently. Jason Nash responded that the pump replacement cycles in the pro forma are based on the actual pump replacements needed by the system currently, which is more frequent than the industry standard. Roberto Scappaticci (Romulus) asked if the increased labor hours needed are included in the pro forma. Jason Tapp responded that the increased labor hours were not included in the pro forma as the expectation was that the dryer system would require no additional O&M employees. Roberto Scappaticci (Romulus) stated that the increased labor hours need to be accounted for in the pro forma.

Jim Taylor (Van Buren Township) stated that the small group continues to work towards the common goal of achieving project success. He added that the small group would be happy to further discuss or answer questions from the Board as requested.

Jason Nash (Veolia CPM) provided an update on the Biosolids Dryer Facility project to the Board (Attachment 7). The dryers were shut down between November 2^nd through November 13^th so that cake pump #2 and door latches could be replaced and so modifications could be made to minimize dust buildup within the dryers. Veolia OM performed maintenance on the dryers and cleaned the media in the condensing towers. It was discovered that 25% of the plastic media in the North condensing tower was damaged and 50% of the media in the South condensing tower was damaged due to the combination of excess heat and compression. Kruger replaced the media under warranty and reinstalled the media just before Thanksgiving. DUWA’s third-party consultant is currently exploring options to clean and prevent biofouling and damage of the media.

The North dryer was started on November 14^th, then on November 15^th, there was an error with the fire suppression system. The circuit board had burned up, and this was replaced on December 1^st. The North Dryer has since been online since December 1^st and the South Dryer has been online since December 6^th. As the dryers have been operating, some moisture has been noticed in the dryers which may be related to an issue with the condensing towers. The throughput through the dryers was reduced to 50% capacity as the team works to resolve this issue.

Pump tests were performed on all dosing pumps yesterday. The dosing pumps to the South Dryer all met their design capacities and have run about 1200 hours since the last pump replacement. The dosing pumps to the North Dryer showed about a 20% reduction in pump capacity after 1300 hours of run time and a 40% reduction in capacity after 1500 hours of run time. Pump degradation is occurring about every 60 days. The pump manufacturer will begin performing partial pump rebuilds. The cake pump motors are currently running at their full load amp capacity. Kruger is working to replace the existing motors with 7.5 amp motors.

Mayor Bill Bazzi (Dearborn Heights) asked whether the various dryer system components are meeting their design intent. Jason Nash responded that preventative maintenance is being performed at the expected frequencies; however, failures seem to be occurring earlier than expected. For example, the condensing tower media has been fouling at an increased rate even though the sensors indicate that the system is operating as expected. Additionally, pumps are expected to last one year before needing to be replaced, but pump degradation is currently being experienced after 60 days potentially due to an increased level of grit, wrong pump size, or other issue. Pump degradation on the BLIS pumps is also occurring faster than expected even though the pressures are within optimal operating ranges. Mayor Bill Bazzi (Dearborn Heights) expressed the importance of documenting these items for future reference.

Roberto Scappaticci (Romulus) asked if the third-party consultant has reviewed the pump curves to verify that the pumps were sized correctly. System Manager Tercala responded that the third-party consultant reviewed the pump selection and pump curves, and Kruger will be upsizing the cake pump motors. The dosing pumps have been experiencing pump degradation every 60 days. Jason Nash added that pump materials can be changed, but it would be difficult to upsize the pumps as bigger pumps may not fit within the current location. Attorney Kerry Morgan (Riverview’s attorney) asked which pump component is experiencing degradation. Jason Nash responded that the internal metal piece with a soft, outer piece on the progressive cavity pumps are experiencing degradation. When both the inner and outer pieces were replaced, the pump still had to be replaced not long after. Other pump manufacturers could provide the necessary pumps, but the pumps need to be able to provide a continuous stream without starts and stops. The pumps were procured by Kruger. Attorney Kerry Morgan (Riverview’s attorney) suggested that another pump from a different manufacturer be installed to see if the pump experiences the same degradation as is currently being experienced with the existing pumps. System Manager Tercala added that this option has been discussed with the third-party consultant.

Mayor Joseph Kuspa (Southgate) asked if upsizing the pump motor equates to increasing the pump size. Jason Nash responded that the cake pumps have struggled pumping the thick sludge, so upsizing to 7.5 horsepower motors will help pump the sludge and will not require upsizing the pump itself.

 

6. OTHER REQUESTS FOR AUTHORIZATIONS AND APPROVALS
System Manager Mackenzie Johnson Chamberlain, of OHM Advisors, presented the following requests to the Board:

a. 2024 Insurance Renewals
Mike De Martin and Brandon Bacon from Aon, DUWA’s insurance provider, were in attendance to present the 2024 insurance renewals (Attachment 8). Every three to five years, it is typical to check the market for other insurance providers to compare costs and coverages. Last year, Aon checked the market for property insurance, and as a result, DUWA changed its property insurance carrier to Chubb. Hanover has historically provided DUWA with its Inland Marine coverage (coverage of collection system assets), and up until this year, there has been no change in premium costs. The Package Liability insurance provider has also remained stable.

Throughout the market, Aon has seen 90% of its clients realize a 10% increase in property insurance premiums this year. Chubb has provided DUWA with a proposed 8% increase of the property insurance premium for 2024. Historically, Hanover’s insurance premium for Inland Marine coverage has not changed, however this year, Hanover requested that DUWA update its collection system asset replacement costs, which were increased by 3%. Additional analysis of the asset replacement costs will be conducted next year. Hudson, DUWA’s Package Liability insurance provider, has had a history of no losses with DUWA. Last year, there was limited interest from insurance carriers to provide coverage to DUWA because of DUWA’s population size. Costs and coverages for Package Liability insurance were not competitive so it was not advantageous to switch carriers at that time.

The proposed 2024 insurance renewals reject the terrorism premium. In order for a claim of terrorism to be covered, the terrorism act would need to be certified by the federal government, which has not happened since September 11, 2001. DUWA has historically rejected the terrorism premium due to its low probability of occurrence. The insurance renewal premiums also include a Michigan Surplus Line Tax which applies because Hudson is located outside of the State of Michigan. Most liability insurance carriers also now exclude PFOS coverage as many utilities and chemical industries are at higher risk for damages resulting from PFOS.

Attorney Kerry Morgan (Riverview’s attorney) asked if a rider for PFOS coverage is available. Mike De Martin (Aon) responded that previously, PFOS coverage could be added to liability coverage, however, PFOS coverage is now being excluded from the pollution market. However, DUWA currently has an Environmental Pollution Policy that can be applied. Additionally, many insurance policies now have “Communicable Disease Exclusions” as a result of the COVID-19 pandemic. Mayor Joseph Kuspa (Southgate) asked what insurance claims DUWA has submitted since the system transfer. Brandon Bacon (Aon) responded that since the system transfer in 2018, DUWA has claimed no losses.

Three motions for the insurance renewals were presented for approval. Mayor Joseph Kuspa (Southgate) asked that the motions be revised to include the amounts owed for each of the insurance renewal premiums.

Motion by Jeff Dobek (Riverview) and supported by Roberto Scappaticci (Romulus) to authorize the Chair or Vice Chair to execute agreement(s) with Hudson for the 12-month liability coverage renewal for a fee of $149,404 without election of the terrorism premium. The motion passed unanimously by all attending members.

Motion by Mayor Bill Bazzi (Dearborn Heights) and supported by James Krizan (Lincoln Park) to authorize the Chair or Vice Chair to execute agreement(s) with Hanover for the 12-month Inland Marine Floater coverage renewal for a fee of $66,400 without election of the terrorism premium. The motion passed unanimously by all attending members.

Motion by Mayor Joseph Kuspa (Southgate) and supported by Greg Mayhew (Wyandotte) to authorize the Chair or Vice Chair to execute agreement(s) with Chubb for the 12-month Property Insurance coverage renewal for a fee of $373,979 without election of the terrorism premium. The motion passed unanimously by all attending members.

b. Workers Compensation Coverage Renewal
DUWA maintains a Workers’ Compensation and Employers Liability Insurance Policy through Accident Fund Insurance. Although DUWA does not have employees, Aon has recommended that DUWA maintain workers’ compensation insurance in the event someone ever argues that they are a DUWA employee by way of being a contractor to DUWA. The current policy term is set to expire on 01/17/2024. A fee of $406 is required to renew this policy through 01/17/2025 (Attachment 9).

Motion by James Krizan (Lincoln Park) and supported by Roberto Scappaticci (Romulus) to approve the Workers’ Compensation and Employers Liability Insurance Policy renewal by Accident Fund from 01/17/2024 through 01/17/2025 for a total cost of $406. The cost will be paid from DUWA’s Insurance Premiums budget line item. The motion passed unanimously by all attending members.

c. PLC-5 Replacement Design
The three Programmable Logic Controllers (PLC-5s) that operate the solids handling equipment (such as the centrifuges and rotary lobe pumps) are extremely critical to plant operations because the solids handling equipment cannot be run manually without the PLC-5s. The three PLC-5s in the Solids Handling Building have reached the end of their useful lives, and the hardware has been discontinued by the manufacturer and is no longer supported. In order to upgrade the PLC-5s, it is desired to proceed with a conversion kit approach, which involves replacement of the PLC-5 hardware but allows all field wiring to remain in place. This approach will also minimize downtime.

Three proposals were received for the PLC-5 replacement work:

• • • • HRC with ICS – $46,200 for design and bidding services
      • Burns & McDonnell – $84,500 for design and bidding services
      • CDM Smith with PCI – $474,118 for design and construction, including equipment procurement

The HRC and Burns & McDonnell proposals involve a traditional design-bid-build delivery method in which these firms would design and bid the project, and the construction would be under a separate contract with the selected integrator. With this delivery method, DUWA will have more control in the ability to choose the construction integrator, and the overall project cost is expected to be lower due to the risk for the design and the builder being lowered through a more detailed design and coordination process compared to a design-build project delivery method. The CDM Smith proposal involves a design-build approach in which CDM Smith would partner with PCI as its integrator to design and then construct the project. Upon review of the proposals received, HRC is the recommended firm with its design-bid-build approach as they have the lowest cost and most familiarity with the DWTF (Attachment 10). This recommendation was reviewed by the Technical Committee and was recommended for approval.

Roberto Scappaticci (Romulus) asked for the expected construction cost. System Manager Tercala responded that the construction cost was budgeted to be about $500k.

Motion by Jeff Dobek (Riverview) and supported by Mayor Joseph Kuspa (Southgate) to authorize HRC to perform the engineering design of the PLC-5 conversion kits and provide bidding assistance services for a not-to-exceed fee of $46,200. The design fee will be paid from DUWA’s Engineering Services line item of the budget. The motion passed unanimously by all attending members.

d. RAS Pump #2 Repair
Return Activated Sludge (RAS) Pump #2 is a 50-year old submersible pump that is installed in secondary clarifier #2. It is used to continuously pump the settled sludge from the bottom of the clarifier back into aeration. The pump experienced a total motor failure due to an electrical short that occurred inside the windings. Veolia found a pump company that could remove the winding and build a new motor within the existing housing. The new pump components also include a warranty. One spare pump is available between the four secondary clarifiers, and this spare pump was installed until the pump can be repaired. The cost to repair the pump has been quoted to be $54,768.08 inclusive of tax, which is significantly less than the cost to replace the pump which would be about $150k. Veolia did not apply their 10% markup to this cost (Attachment 11).

Mayor Joseph Kuspa (Southgate) asked for the name of the pump manufacturer. Jason Tapp responded that Wilo is the pump manufacturer, but is no longer in business. Chairperson McLeod (Allen Park) asked how long the warranty lasts. Jason Tapp responded that the warranty is good for one year.

Motion by Rick Rutherford (Belleville) and supported by Mayor Joseph Kuspa (Southgate) to authorize payment to Veolia for a fee of $54,768.08 for repair of RAS Pump #2. This fee will be paid from DUWA’s Capital Outlay budget line item. The motion passed unanimously by all attending members.

e. Reimbursement for Odor Control Expenses
Significant odors were reported by residents who live near the DWTF after the dosing of ferric chloride was eliminated. A pilot hydrogen peroxide system was installed for odor control after bench test results showed its success at reducing hydrogen sulfide. Upon dosing of the hydrogen peroxide, there was an immediate reduction in hydrogen sulfide, however, after a prolonged reaction time, it was ineffective at reducing all odors. In response, Veolia resumed dosing a small amount of ferric chloride for odor control and has since stopped dosing the hydrogen peroxide. Veolia is performing analytical lab tests once a week to ensure the ferric chloride dosing rate is low enough to prevent biosolids reheating events. Veolia is requesting reimbursement in the amount of $117,357.25 for the five shipments of hydrogen peroxide received at the DWTF (Attachment 12). Veolia is covering the costs for the construction staging and system setup, and is not applying their 10% markup to the chemical cost.

Mayor Joseph Kuspa (Southgate) asked how long the hydrogen peroxide trial lasted and whether there has been communication with the City of Wyandotte. Jason Tapp responded that the trial lasted about two months and the remaining hydrogen peroxide will be cycled through the DWTF so that there is no need for disposal. He added that Veolia attended Wyandotte’s City Council meeting last month to address the odor complaints and provide an update on odor control efforts. All Veolia employees at the DWTF are also equipped with personal hydrogen sulfide monitors.

Motion by Mayor Joseph Kuspa (Southgate) and supported by Greg Mayhew (Wyandotte) to authorize payment to Veolia for a fee of $117,357.25 for reimbursement of the hydrogen peroxide chemical costs. This fee will be paid from DUWA’s Plant Operations line item of the budget. The motion passed unanimously by all attending members.

 

7. CONTRACT OPERATOR UPDATE
Jason Tapp and Travis Tuma, of Veolia, provided the Contract Operator update.

a. Plant Performance
Jason Tapp, of Veolia, reported that Veolia has resumed dosing ferric chloride at a rate of 0.2 gpm. Hydrogen peroxide is not currently being dosed, and there are about 3,000 gallons of hydrogen peroxide remaining onsite. The remaining hydrogen peroxide will be cycled through the DWTF as needed. With the use of hydrogen peroxide, an increase in fecal counts and turbidity was experienced, but these levels have since returned to normal once dosing of the hydrogen peroxide was stopped.

Jeff Dobek (Riverview) asked if DUWA has received any odor violations from EGLE. Jason Tapp responded that no violations have been received. He added that Gus Vazquez, from EGLE, is present at the Board meeting today and will be performing a routine reconnaissance inspection at the DWTF this afternoon.

b. October 2023 MOR
The October 2023 Monthly Operating Report (MOR) was provided in the Board’s pre-meeting packet (Attachment 13). Highlights from the summary and other updates included the following:

• • • The plant treated about 996 million gallons of wastewater this month. No bypasses have occurred this year, and it has been about two years since a bypass has occurred.

    • There were three open positions in October. One operator position was filled, but then another employee resigned yesterday. Veolia is also currently onboarding two new employees.

    • The rotating assembly on Centrifuge #1 in the Solids Handling Building was replaced after there was an issue with the dried cake exiting the centrifuge.

    • The mist eliminator mesh padding on the condensing tower was removed and cleaned using bleach to kill the biological growth. It is expected that cleaning of the mist eliminator padding will need to occur every two to four weeks. This is a large O&M job. The South Dryer is planned to be shut down in the next day or two to clean the South Dryer condensing tower as well.

    • Routine collection system work continued.

    • A full plant standdown was performed in October where all employees cleaned the plant yard and picked up trash and debris before the winter weather sets in.

    • There were 314 Miss Dig tickets received in October, of which 27 were emergency requiring a quick response time. The number of Miss Dig tickets received is beginning to slow down as construction season winds down.

System Manager Tercala commented that Michael Tapp, of Veolia, does a good job of reviewing record drawings and GIS data to determine asset ownership between DUWA and the communities. She added that DUWA has a GIS database that can be shared with communities upon request.

c. Chemical & Sludge Price Updates
Jason Tapp presented the summary of commodity unit price changes to the Board (Attachment 14). There have been no significant increases on chemical unit pricing. Veolia has temporarily stopped using one of their sludge haulers for dewatered sludge because another sludge hauler has provided Veolia with an extra trailer at a lower rate. Veolia will still maintain its contract with the other hauler through 2024, but will only use them as needed since their trailers are smaller and cannot carry as much weight. Veolia currently sends four to five trailers per day of dewatered solids to the landfill for disposal and sends about one trailer per day of dried solids to the beneficial reuse facility in Canada.

d. Existing Disinfection System Remaining Life Update
Jason Tapp stated that Veolia continues to explore liquidation sites and other online resources for spare UV parts to maintain a stocked inventory of spare parts to keep the current system online until the new UV system is commissioned. Veolia recently found an inventory of spare parts for sale on a government auction site. The spare parts, which include bulbs, ballasts, and quartz sleeves, are from a decommissioned Trojan UV system in Boise, ID where the new Trojan UV system has been installed. The spare parts have the same model numbers as the parts used by DUWA’s UV system, and the spare parts are in new condition. Veolia was able to purchase about $200k worth of spare parts for a very cheap price of about $4,500. The spare parts have arrived onsite, and given the current inventory of spare parts, it is expected that the existing UV system can be maintained until the new UV system is online. Veolia’s electrical contractor plans to be onsite all week to service the UV system.

 

8. TREASURER’S REPORT

a. 2024 Financial Calendar
Treasurer Jason Couture (Taylor) presented the 2024 Financial Calendar as an informational item only (Attachment 15). The 2024 Financial Calendar dates correspond to the administrative policy as it relates to timelines for rate setting and budget approval as well as Master Bond Ordinance reporting requirements.

b. Resolution to Adopt CY2024-2025 Budget (2-Year)
Treasurer Jason Couture (Taylor) presented the proposed Resolution Adopting the CY2024-2025 Budget (Attachment 16). He noted that the CY2024 budget reflects a net revenue of about $129k, which accounts for bond and grant proceeds as well as UV project and other capital project expenditures. The CY2025 budget reflects a net deficit of about $350k. DUWA’s bylaws require that a 2-year budget be developed each year. The budgeted values for 2025 are based on general assumptions, but the values for 2024 are more precise.

Motion by Mayor Joseph Kuspa (Southgate) and supported by Mayor Bill Bazzi (Dearborn Heights) to adopt the CY2024-2025 budget. The motion passed unanimously by all attending members.

c. Aging AR
Treasurer Jason Couture (Taylor) presented the Aging Accounts Receivable report (Attachment 17). Treasurer Couture stated that the total amount in the Accounts Receivable is approximately $2.4M of which 92% is less than 90 days delinquent. He also noted that payments in the amount of about $1.1M have recently been received, but are not yet reflected on this report. River Rouge has several outstanding invoices over 60 days, and Accountant Doug Drysdale (Southgate/DNS Financial Services) is working with their finance department on these payments. Dearborn Heights also has an outstanding invoice over 60 days, but it is possible that this payment has been received as part of the recently received payments that are not yet reflected on this report.

d. Pending Invoices
Treasurer Jason Couture (Taylor) presented the invoice register for a request for payment. The revised invoice register was provided to the Board as a day-of handout (Attachment 18). The revised invoice register included 49 invoices due for a total of $4,480,199.09. The largest invoices included those to Veolia for operations and maintenance, unit cost reconciliations, and equipment replacement, Aon for 2024 insurance premiums, Walsh for their final reconciling change order and release of retainage, Wayne County for use of the Southgate-Wyandotte outfall, and Wyandotte Municipal Services for utility services.

Chairperson McLeod (Allen Park) asked why the total check amount for signature is less than the total amount in the invoice register. Accountant Doug Drysdale (Southgate/DNS Financial Services) responded that some invoices to vendors, such as Aon, will be paid by ACH wire transfer as opposed to paid by check.

Motion by James Krizan (Lincoln Park) and supported by Jeff Dobek (Riverview) to pay the invoice register. The motion passed unanimously by all attending members.

 

9. PUBLIC COMMENT
There was no public comment.

 

10. OTHER BUSINESS
Mayor Joseph Kuspa requested that in addition to the diagram handouts provided at today’s Board meeting, a large visual board showing the various DWTF and Dryer System components be brought to future Board meetings to assist with associated discussions. Chairperson McLeod (Allen Park) supported this suggestion and added that it would also be helpful to have arrows on the various diagrams and drawings. Mayor Bill Bazzi (Dearborn Heights) also requested that the visuals be provided digitally as well. System Manager Tercala confirmed that a large visual board would be provided at future Board meetings.

Jim Taylor (Van Buren Township) reminded the Board that Black & Veatch will be hosting a meeting with the Technical Committee tomorrow to review the 50% design deliverables. He suggested that the Board Commissioners follow-up with their technical personnel to ensure they will have representation at the meeting. System Manager Tercala added that communities’ Director of Public Works, engineers, and consultants typically attend the Technical Committee meetings. Chairperson McLeod (Allen Park) asked that the meeting invite be sent to her so that she can forward to the appropriate personnel. Mayor Bill Bazzi (Deaborn Heights) asked that the System Manager inform him whether someone from Dearborn Heights plans to be in attendance.

Jeff Dobek (Riverview) expressed his concern about Kruger’s trial and error approach to resolving the operational issues with the dryer system. He moved that DUWA’s Legal Counsel provide their legal opinion on potential litigation options that DUWA could pursue. Attorney Grysko reminded the Board that DUWA is currently under a Tolling Agreement with Kruger until March, which pauses the time period during which damages can be assessed. However, the Tolling Agreement does not prevent DUWA from examining future litigation options.

Motion by Jeff Dobek (Riverview) and supported by Mayor Bill Bazzi (Dearborn Heights) for DUWA’s General Counsel to provide their confidential legal opinion to the Board addressing DUWA’s litigation options, potential defendants, and probable damages. The motion passed unanimously by all attending members.

 

11. NEXT BOARD MEETING DATE: Thursday, January 11, 2024 (9:00 AM; In-Person)
Chairperson McLeod (Allen Park) reminded the Board that the next meeting would take place on Thursday, January 11, 2024 at 9:00 AM in-person at Taylor City Hall. Chairperson McLeod (Allen Park) wished everyone a happy holiday season.

 

12. ADJOURNMENT
There being no other business, Chairperson McLeod (Allen Park) announced that a motion to adjourn would be in order. Motion by Mayor Bill Bazzi (Dearborn Heights) and supported by Mayor Joseph Kuspa (Southgate) to adjourn the meeting. The motion passed unanimously at 11:16 AM.

 

Meeting Minutes Prepared by:
Mackenzie Johnson Chamberlain, Engineer  |  OHM Advisors

Meeting Minutes Reviewed by:
Lambrina Tercala, DUWA System Manager  |  OHM Advisors

 

ATTACHMENTS

1. Meeting Agenda

2. November 9, 2023 DUWA Board Meeting Minutes

3. Monthly Legal Update (by Fausone & Grysko)

4. Walsh Final, Reconciling Change Order

5. System Manager Report for December 2023 (by OHM Advisors)

6. UV Disinfection Replacement Project Update (by OHM Advisors)

7. Biosolids Dryer Facility Project November 2023 Monthly Progress Summary (by Veolia)

8. 2024 Insurance Renewals

9. Workers’ Compensation Insurance Renewal

10. HRC Proposal for Design Engineering Services for PLC-5 Replacements

11. Request for Repair of RAS Pump #2 (by Veolia)

12. Reimbursement of Odor Control Expenses (by Veolia)

13. Monthly Operating Report for October 2023 (by Veolia)

14. DWTF Unit Price Changes Summary (by Veolia)

15. 2024 Financial Calendar

16. Resolution to Adopt the CY2024-2025 Budget (by Doug Drysdale)

17. Aged Accounts Receivable Report, dated December 7, 2023 (by Doug Drysdale)

18. Invoice Register, dated December 7, 2023 (by Doug Drysdale)

19. 2024 Board Meeting Schedule